End-stage renal disease (ESRD) is a condition that affects over 2 million people worldwide. If a patient is diagnosed with ESRD, they have lower than 15% of normal kidney function. The primary form of treatment for the condition is dialysis: an effective treatment that emulates the physiological functions of the kidneys, but is a grueling and exceptionally time-consuming process. NephRun’s patented wearable artificial kidney (WAK), however, is a wearable and portable medical device that regulates the waste removal and blood renewal functions that the kidney typically controls, similar to dialysis. But because of the longer term of treatment and the mobile nature of the device, patients are not confined to the bed and can perform any daily activities with ease. Through the distribution of the wearable artificial kidney, NephRun hopes to release end-stage renal disease patients from the shackles of dialysis and allow them to fully assimilate into their typical lifestyles. NephRun is currently part of a group purchasing deal with Prospitalia that will be completed by month 6 of 2022.
Mission Statement

“NephRun aims to enhance our patients’ quality of life through accessible treatments and superior technology.”
Problems: Dialysis, although lifesaving, is
Time-consuming: Patients are forced to spend 4 hours for 3 days of the week.
Physically arduous: Side effects are plentiful and a large amount of medication is needed.
Detrimental to quality of life: Patients have a high rate of depression and often lose their jobs.
Customer Segments:
Primary Segment: Group Purchasing Organizations and Integrated Delivery Networks. (Groups of providers and hospital systems). 98% of hospitals belong to at least one GPO.
Secondary Segment: Private Nephrologists ($200,000+ income and looking to serve their patients effectively)
Solutions: The wearable artificial kidney is the first product of its kind to perform dialysis on-the-go.
Lower costs for patients: While conventional dialysis treatment costs upwards of $80,000 a year, the WAK reduces that number to $19,000.
Reduced Costs for Government and Private Insurers: Insurers pay tens of billions of dollars to pay for dialysis drugs, which are not necessary for the WAK to function properly.
Mobility: The majority of dialysis related issues stem from the patient’s lack of mobility when undergoing treatment. The wearable-artificial kidney ensures that the patient has a full range of motion during treatment, allowing them to preserve their jobs and live their life normally.
Revenue structure: The WAK will sell for $11,000 per unit on average for a group purchasing deal and will sell for $15,000 per unit to private nephrologists.

Financials: NephRun requires a $3 million loan to cover operating, advertising, production, and patent production costs. Payment will begin on month 7 after Nephrun’s group purchasing deal with Prospitalia is completed. The term length will be 30 months at an interest rate of 7% with monthly payments of $109,296. The total interest amount is equal to $278,872.

I. Analysis of the International Business Situation
Economic and Governmental analysis – The United Kingdom has an economic system largely similar to that of the United States. With its highly developed market economy, the United Kingdom is the 5th largest economy in the world. The UK benefits tremendously from foreign investment, primarily from the United States and Japan. In June of 2016, the UK conducted a referendum on whether to leave the European Union. The measure passed, and ever since, the UK has been attempting to withdraw from the EU. December 31st, 2020 marked the end of the transitory period of the UK’s final year in the EU. However, its inability to finalize a trade agreement with the EU has left England open to new trading partners and business. NephRun plans to use this opportunity to base its international operations in the UK, as the newly decreased business tax and loosened trade restrictions make it a lucrative opportunity. Because NephRun does not plan to have a physical presence within the U.K. as distribution will be handled by Prospitalia Group, NephRun will not need to register as a company within the U.K. We simply have to file a company tax return. For medical device approval, NephRun will send the Wearable Artificial Kidney (WAK) to the Medicines and Healthcare products Regulatory Agency as a Class III medical device.

Demographic analysis – There are very relevant differences between the U.K. and U.S. in regards to the demographic viability of NephRun’s wearable artificial kidney (WAK). The WAK is an incredible solution to the truly international problem of ESRD, and the projected reception to the product in the U.K. is certainly indicative of this. The U.K. has an advanced and robust medical system and the WAK will easily find a niche within it.

Geographic analysis – The largest concentration of ESRD patients and healthcare facilities is found within the Southeast of Britain. The WAK will initially be released within this area as agreed upon within its agreement with Prospitalia Group. The product will, however, be spread across the country to meet dialysis demand as production increases.

II. Problems
Time – NephRun’s wearable artificial kidney addresses the dialysis industry’s need for a less time-consuming alternative to dialysis. In a study of 474 dialysis patients, the issue of time and transportation was ranked second in importance, following pain control and end-of-life arrangements. The majority of the 500,000 dialysis treatments in the U.K. consist of four hour exchanges that occur three times a week. Another type of dialysis requires daily visits to the hospital, where the patient is confined to an uncomfortable room for two hours every day. These near-daily visits to the hospital for hours at a time force many patients to quit their jobs, as they can not be in two places at once. Patients are also often uneasy about spending long hours in the unfamiliar environment of the hospital and would much rather prefer to receive treatment in their homes. The WAK allows doctors to treat their patient’s dialysis without requiring the patient to sacrifice their jobs and their time. With the WAK, patients can continue to enjoy their livelihoods, provide for their families, and live their lives as normally as possible.

Stress on the Patient – Dialysis is the process of removing excess water, solutes, and toxins from the blood in people whose kidneys can no longer perform these functions naturally. However, dialysis differs from the kidneys in one major way. The dialysis machine can perform the job of the kidney in 12 hours, while it would take the kidneys one week to accomplish the same task. Although this seems like a good thing, dialysis places a great deal of strain on the patients’ body, which can result in side effects including low blood pressure, high potassium levels, and various bone diseases. The obvious solution would be to lengthen to time of dialysis to make the treatment less intense, but that comes at great expense to the patient’s time and their quality of life. By increasing the time over which the treatment is spread, NephRun’s WAK enables patients to enjoy their lives as if they were not being treated for a chronic illness. On average, dialysis patients take 20 to 30 pills a day and their diets are severely restricted. If patients switched from traditional dialysis to the WAK, these side effects would not be present. With the WAK filtering the blood constantly, as their kidneys would do, patients are healthier and experience fewer side effects, according to numerous studies.

Quality of Life – Despite hospitals’ best efforts, the quality of life for a patient undergoing dialysis is deplorable. Patients frequently end up in the hospital where they are often chronically thirsty. In addition, they cannot eat what they want, and most don’t sleep well. Many dialysis patients have trouble holding a job because they have to go to dialysis three days a week for four hours at a time, so they end up needing to register themselves as disabled to receive work benefits. All of these issues and more take a toll on their mental health, which is why 73.1% of dialysis patients also suffer from depression. Entire web forums are devoted to how fervently patients hate dialysis, including the aptly named “ihatedialysis.com”, which has over 10,000 members and more than half a million posts. Created with these grievances in mind, NephRun’s WAK revolutionizes the dialysis industry because it was developed with an understanding of the concerns that so many dialysis patients share. The WAK drastically improves the quality of life for people suffering from ESRD (end-stage renal disease) because it is the only portable treatment for kidney failure, and it does so at a much cheaper cost than conventional dialysis.

III. Customer Segments
NephRun’s WAK device will play a pivotal role within the ESRD treatment market. Its primary competitor will be existing dialysis technology and its associated producers. The worldwide dialysis industry is valued at ~$74.2 billion but NephRun will be focusing on the U.K. market. Due to the current structure of the medical device supply chain, NephRun will focus on selling the Wearable Artificial Kidney to group purchasing organizations and private nephrologists.
Primary Segment: Group purchasing organizations (GPO) and independent delivery networks (IDN)
Geography – Operate throughout the United Kingdom
Demographic: Groups of healthcare networks that operate jointly to purchase medical devices in bulk

Secondary Segment: Private Nephrologists
Geography: Found across the U.K.
Demographic: Independent kidney specialists. Income $200,000+
Psychographics: Healthcare professionals who wish to treat their patients in the most optimal way possible

IV. Unique Value Proposition

NephRun’s Wearable Artificial Kidney was designed to address the problems faced by the nearly 500,000 people on dialysis today. Its compact and wearable nature allows the patient to enjoy a normal life with minimal side effects, a saving grace for the family and friends of someone undergoing dialysis. End-stage renal disease is a life changing and life threatening disease, but its treatment does not have to be as stressful on the patient as it currently is. By prioritizing the patient’s quality of life, the WAK makes treatment for ESRD as painless as possible. These technologies are patent protected, preventing companies from profiting from our equipment. Furthermore, the normalcy that the WAK provides far exceeds the uncomfortable dialysis treatments of today.

V. Solutions
A healthy individual’s kidneys filter blood 24 hours/day, 168 hours/week compared to an individual with end-stage renal disease whose dialysis treatment plan is approximately 12 hours a week. The treatment results in a lower quality of life as well as a higher mortality rate for patients with end stage renal disease (ESRD). Therefore, there is a need for an around-the-clock device that will allow ESRD patients to receive dialysis continuously while maintaining a normal life. The wearable artificial kidney performs many of the same functions of a biological kidney but in the form of a compact, wearable, and battery operated device. The device weighs approximately 5 kg and can be worn around the waist.
Reduced Treatment Costs for Patients: In the United Kingdom, the average cost for dialysis treatment for one year is $80,000. In comparison, the WAK costs only $19,000 yearly, saving the consumer over 75% annually. However, the savings extend beyond the dialysis machine itself. Dialysis patients pay tens of thousands in additional costs for drugs to treat low blood pressure, hyperkalemia, and anemia. With the WAK, these drugs are no longer necessary as the device accurately mimics the kidney, reducing pill burden and the costs associated with it.

Reduced Costs for Government and Private Insurers – In 2017, the government of the United Kingdom spent $35 billion on dialysis care, and private insurers spent $81 billion. This is an incredibly high amount of spending relative to the population of dialysis patients. In contrast, the WAK dramatically reduces costs for insurers and hospitals by minimizing the need for dialysis drugs. Additionally, the cost of dialysis drugs pale in comparison to the $7.2 billion that the U.K. government pays to dialysis patients in the form of disability benefits. Dialysis treatment recipients are stuck to hospital beds for multiple hours during the week, resulting in many losing their jobs. As a result, many ESRD patients are now classified as disabled to receive benefits. If the WAK replaces dialysis as the primary method of ESRD treatment, a significant portion of the population would be rendered productive, patients would not lose their jobs, and the government’s budget would have increased flexibility.

Mobility: In stark contrast to the physically restraining properties of dialysis, the WAK allows for patients to completely regain their mobility. Unlike dialysis, where patients are confined to a bed for hours on end multiple times a week, patients are not restrained in their movement when using the WAK due to the battery-operated nature of the device. As long as patients carry the device with them, their blood toxins will be regulated because of the cyclic pump system found within the WAK.

VI. Channels
Advertisements to patients: Since the primary market for the WAK consists of patients already undergoing dialysis treatment, advertisements will be focused within areas of high concentration of dialysis patients. Brochures will be distributed around nephrology units at hospitals as well the locations of private nephrologists. In addition to these physical campaigns, NephRun will purchase online advertisements. To maximize the effectiveness and efficiency of these advertisements, they will specifically be placed on sites containing information about dialysis and end-stage renal disease (ESRD) through Google Ad targeting. By optimizing advertisements in this manner, costs can be reduced and the effectiveness of individual adverts is increased. A passive channel of advertisement will also be word of mouth. As the device gains popularity, knowledge of the WAK as an alternative to dialysis will spread.

Marketing to healthcare providers: To establish relationships with GPOs, IDNs and private nephrologists, NephRun will be hiring a dedicated sales team. In the medical device industry, mutually beneficial partnerships are critical. As a result, NephRun’s will begin to create relationships with providers early in the WAK’s distribution process.

Distribution and Sale: NephRun has recently entered a purchasing contract with the Prospitalia Group, a group-purchasing-organization (GPO) based in Ulm, Germany. Through utilization of the Prospitalia Group’s extensive network of hospitals and healthcare providers, NephRun will be able to reach a large number of ESRD patients quickly. While this deal is certainly large and profitable, it also serves the purpose of raising awareness of the WAK as an alternative to dialysis. For future purchasing contracts, NephRun’s sales team will visit other GPOs and integrated delivery networks (IDNs). NephRun’s sales team will also create relationships with private nephrologists to progressively sell WAK units to ESRD patients. Through group purchasing contracts and connections with private healthcare professionals, NephRun will establish a reliable and profitable network of customers.

VII. Revenue Streams
Revenue Model: NephRun’s revenue model consists of selling units of wearable artificial kidneys to hospitals through group purchasing organizations and independent delivery networks. Because of the bulk purchasing contracts associated with these organizations, each unit within these group sales will be sold at an average initial price of $11,000. In addition to contracts with hospitals, NephRun will cultivate relationships with private nephrologists to capture the existing dialysis market as well as patients recently diagnosed with ESRD. WAK devices will be sold at an average initial price of $15,000 per unit to private nephrologists. Due to NephRun’s group purchasing contract with Prospitalia Group, we are projected to sell 500 units by the second quarter of 2022.

VIII. Cost Structure
Human Resources: NephRun will begin with a team of 30 employees paid an average of $60,000. This team will cover sales, patent coverage, legalities, transportation, advertising, unit production, and management.
Operating Costs: This section comprises human resource costs and all other operating costs (storage, distribution, taxes, patent protection, etc.)
Production Cost: Production of the WAK will be outsourced to China but quality control will still be conducted by a NephRun representative. Additionally, as efficiencies in production materials and processes are found, the cost of producing a unit will substantially decrease over time.
Advertising: The advertising budget consists of the production and distribution of online surveys, physical pamphlets, the purchasing of online advertisements through Google Ads, and the creation of a website displaying information about the WAK product.

Year 1
Year 2
Year 3
Year 4
Sales through group purchases
500 units
1,500 units
3,000 units
15,000 units
Sales to private nephrologists
15 units
35 units
115 units
500 units
Total Revenue
Operating Costs
Production Costs
$3,000 per unit
$3,000 per unit ($4,605,000)
$2,900 per unit
$2,750 per unit
Profit Earned
Gross Margin

IX. Key Metrics
Gross Margins: NephRun’s measurements of profits and margins will allow for a greater understanding of the costs of distribution and creation of WAK devices, enabling the NephRun team to find avenues for efficiency in distribution and production costs.
Number of Units Sold: By tracking the number of units sold, NephRun will gain insight into the popularity of the WAK compared to its primary competitor: dialysis. The rate of new patient acquisition can also be determined through this measurement, allowing for a clear representation of the effectiveness of marketing campaigns and changing distribution methods.
Customer Satisfaction: By establishing connections with individual hospitals and healthcare providers, NephRun will be able to gauge patient satisfaction and habits with greater accuracy. Providers will be given surveys that will be distributed to patients. The patients will have the ability to complete the survey through an online portal or physical pamphlet. The NephRun team can also further its understanding of what is valued by patients through meetings with associated providers. The information gained within the meetings will then be used to implement improvements to the WAK device during later iterations of the product.

X. Competitive Advantage

Conventional Dialysis
Wearable Artificial Kidney
Immobile for extended periods of time
Retain autonomy and the ability to move at all times
Quality of Life
Job loss, high rates of depression, high pill burden
Have to switch from day to device to night device before sleeping
Side Effects
Low blood pressure, anemia, vitamin deficiencies
No known side effects, except for possible mild hand cramping

Although it is lifesaving, dialysis is terrible to experience. The exorbitant price of the process, countless hours strapped to beds, and numerous pills to swallow mean that ESRD patients are constantly searching for alternatives for preserving their life. The WAK serves as an incredibly effective replacement for dialysis with virtually zero downsides. The wearable-artificial kidney completely removes distress from ESRD treatment through lower costs, increased movement, and significantly dampened side effects. With the introduction of the WAK product into the ESRD treatment sphere, the dialysis industry will significantly shrink.

XI. Conclusion
With groundbreaking technology, NephRun will grow to become a world leader in kidney care. Our patented Wearable Artificial Kidney marks the dawn of a new era in dialysis technology, and NephRun will be at the forefront of this pioneering movement. In order to fund production and advertising for the WAK, NephRun is seeking a $3 million loan at 7% interest. The capital will cover the initial costs for 500 units, which will be supplied to hospitals across the U.K. In 2022, NephRun is projected to earn $2,980,000 in profit, which will be reinvested into production, advertising, and various other expenses. The loan will be repaid over a 30 month period with a monthly payment amount of $109,296. The total interest amount will be $278,871.65.